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Wednesday, 2 January 2013

Saudi Arabia’s record expenditure plan reflects the kingdom’s determination to continue spurring domestic growth through public spending amid a global downturn and regional political upheaval.
The world’s biggest oil exporter said on Saturday that it would spend SR820bn ($219bn) this year. It projected a surplus of SR9bn. The government did not reveal the oil price assumption, but Riyadh-based Jadwa Investment estimated it had set production at 9.6m barrels a day at $66 a barrel. Last year’s price average was about $111.5 a barrel.Saudis maintain high spending strategy - FT.com

Wealthy Gulf Arab companies are boosting their investment in Africa's vast lands and untapped resources, marking a shift for investors who have traditionally directed their money towards assets in the United States and Europe.

One reason for the shift is negative: with government debt problems weighing on U.S. and European markets, those regions no longer look as attractive to some Gulf investors as they did just a few years ago.

But there are also a string of positive motives, including Africa's fast economic growth, the rise of a free-spending African middle class, and a sense that much of the continent is becoming better governed and more stable politically.Wealthy Gulf investors warm to Africa | Reuters

When U.S. banking giant Citigroup Inc moved one of its top bankers, Alberto Verme, to Dubai in 2008, it was a sign of international banks' ambitions to tap economic growth in the oil-rich region.

By bringing in Verme, who at the time was co-head of Citigroup's worldwide investment banking operation, the bank became the first among its peers to station the global chief of a major business in the Middle East.

Four years later, the picture has changed dramatically. Verme is back in London as chairman of the bank's Europe, Middle East and Africa business. And like most of its peers, Citigroup has cut jobs in the region as part of a global plan to reduce costs this year. The bank still has a sizeable presence in the Middle East, but on a smaller scale than in the boom years.Global banks rethink Middle East model as deals slump | Reuters

Etihad, Abu Dhabi’s state-owned airline, is making investments in carriers across the world as it pursues its distinctive strategy for rapid international expansion from the crowded Gulf aviation market.
While rivals such as its near-neighbour Emirates of Dubai have grown in influence by creating their own new routes, Etihad is focusing on building international partnerships through setting up code shares and taking minority stakes in other airlines in countries from Germany to Australia.
Etihad last month said it was considering a possible investment in an Indian carrier, underscoring an approach to growth that is seen by analysts as effective but hard to judge definitively because the company makes only limited financial disclosures.Etihad eyes partnership route to growth - FT.com

Dubai's market surged in the first trading session of the new year on Wednesday, boosted by a recovery in property stocks, while most other regional bourses also ended higher on the resolution to the U.S. tax talks.
Property shares in Dubai recovered from losses suffered on Monday in response to the central bank's introduction of caps on mortgage loans. Union Properties surged 8.9 percent and builder Arabtec added 7.1 percent.
"There is good sentiment in the market; Saudi was up on Tuesday, and there was good news from the U.S., which are the main reasons we are seeing the upside today," said Marwan Shurrab, vice president and chief trader at Gulfmena Investments.MIDEAST STOCKS-Mkts climb on cliff deal; UAE property stks up - Yahoo! News Maktoob

Fitch Ratings says an expansionary 2013 budget based on a conservative oil price will support another year of healthy economic growth for Saudi Arabia and a further strengthening of the sovereign's net creditor position. However, overall growth will slow due to a decline in oil production that was already evident in recent months.

The FY13 (31 December 2012 to 30 December 2013) budget unveiled on December 29 projects record spending of USD219bn (34% of GDP), up by almost 20% on the 2012 budget. Budgeted capital spending is 28% higher than in 2012, though the government has struggled to achieve its capital spending targets in recent years. Education and healthcare remain the focus of spending, accounting for 37% of the total. Defence and security tends to be the largest single item, constituting around one-third, but is not disclosed in the budget.TEXT-Fitch:Expansionary budget to support growth in Saudi Arabia | Reuters

“Those who speak of Bankruptcy are the Bankrupt ones”
So Said Morsy to thundering applause in his speech to the newly-appointed-already-Illegal Shura Council, as he laid out his vision on the state of Egyptian economy. I couldn’t suppress my laughter as I watched him say this from a café in Heliopolis, nor could I suppress my falling on the floor holding my belly from laughter as I heard him talk about how great Tourism is doing, and how, for the first time, our debt is only 87% of our GDP. Only.
Morsy is hilarious. It’s an undeniable fact. He is even more hilarious when he gets exposed.Happy New Year, Infidels!

Oil rig maker Lamprell (LAM.L) said it had been successful in negotiating waivers to its banking covenants and was making progress on a wider deal to provide long-term financing.

The company said its working capital position had improved significantly in recent months and it had ended the year with net cash of about $100 million due to improved revenue and tighter financial controls.

Qatar Telecom (Qtel), the majority state-owned telecommunications operator, has agreed with the Tunisian government to buy a further 15 percent stake in that country's operator Tunisiana for $360 million.
The purchase raises the Qatari firm's stake in Tunisiana to 90 percent, Qtel said in a statement seen on Wednesday. Wataniya, Qtel's Kuwaiti arm, already held 75 percent of Tunisiana.
The Tunisian government will retain a 10 percent holding in Tunisiana with a view to conducting a public offer of shares in future, the statement added.Qtel buys further $360 mln stake in Tunisian telco - Yahoo! News Maktoob

United Arab Emirates markets rise with gains across the board as positive global sentiment lifts stocks, and
as property shares recover from losses on Monday in response to the central bank's introduction of caps on mortgage loans.
Dubai's index rises 1.1 percent to 1,641 points and Abu Dhabi's benchmark advances 0.8 percent to 2,652
points. Abu Dhabi is heading for a break of chart resistance around 2,640 points, which was support in October and November, and which the index tested and failed to break last week.
Bellwether Emaar Properties is up 1.3 percent and contractor Arabtec also up 1.3 percent. Dubai Financial Market stock advances 3.0 percent.STOCKS NEWS MIDEAST-UAE mkts rise, property stocks recover - Yahoo! News Maktoob

The President of the UAE Sheikh Khalifa bin Zayed Al Nahyan has issued a decree releasing all the expatriates held in prison for bouncing post-dated checks, a hang over from the 2009 recession in the Emirates that hit many debtors very hard leaving them personally liable for bad debts secured by checks signed by them.

The "undercover economist" Tim Harford recently wrote: "The wonderful thing about a forecast is that both the forecaster and his audience feel that something profound has been expressed."

He was discussing the eruption of New Year forecasts coming in every direction, but especially in economics and finance. Everybody, it seems, is taking a stab at the level of the S&P 500, or the price of gold, or the dollar/euro rate at the end of December.

Now, I'm no economist, but I cannot resist the urge to peer into the crystal ball at least once a year.

Qatar Airways yesterday hit back at statements by German Emirati joint venture company Lindner Depa Interiors (LDI) that it had not delayed the opening of the New Doha International Airport (NDIA).
The Doha-based airline has been severely affected by the delayed airport opening – scheduled for last month – due to LDI ‘badly defaulting’ on its contract.
LDI had been awarded a $250m contract to build 19 airport lounges, work which should have been completed six months ago. The contract was terminated due to LDI defaulting, delaying the airport opening by up to 12 months, a Qatar Airways release said.Qatar Airways hits out at Lindner claims